NASHVILLE, Tenn. — Regulators and utility officials commiserated over the difficulty in overcoming public opposition to large energy infrastructure projects during a panel discussion at the National Association of Regulatory Utility Commissioners summer conference last week. About 1,000 people attended.
Iowa Utilities Board member Libby Jacobs, who moderated the session, said she had become the target of vitriol following her vote in June approving the Dakota Access Pipeline, which will carry crude oil from North Dakota’s Bakken field through South Dakota and Iowa to Illinois. The week before the NARUC meeting, an activist group staged a street theater performance outside IUB offices called “In Bed with the Bakken,” in which one protester portrayed Gov. Terry Branstad bottle-feeding an oil pipe.
“I’m also very familiar with the anti-infrastructure protesters,” offered FERC Commissioner Cheryl LaFleur from the audience, referring to the monthly protests at FERC open meetings.
Opposition to infrastructure projects has been a challenge “since I’ve been in the industry,” she continued. “But I sense something different happening.
“I’m a little concerned … with the growing thought out there that maybe we don’t need any infrastructure at all,” LaFleur said. “‘We’re just going to close what we have and replace it with everything distributed.’”
Jacobs, a former corporate communications executive, said protesters have benefited from social media as an organizing tool.
Aakash Chandarana, regional vice president of rates and regulatory affairs for Xcel Energy’s Northern States Power, said utilities need to do a better job of educating their customers.
“Often times we as a utility are trying to talk to our customers at the most intense period in our relationship — either through storms or during a rate case or something like that. … We have to approach our customers at a period of time where maybe there isn’t as much emotion.”
Robert Kenney, vice president of state regulatory relations for Pacific Gas and Electric, agreed. “I’m not sure that utilities or regulators have done [a good] job in helping customers understand why certain investments need to be made,” he said.
He lamented the utility’s decision, announced in June, to retire the Diablo Canyon nuclear plant when its current operating licenses expire in 2024 and 2025, noting it “has been a source of greenhouse gas-free energy for the last 30-some odd years.” (See PG&E to Shut Down Diablo Canyon, California’s Last Nuclear Plant.)
“The political climate in California was such that being able to relicense that beyond 2024 and 2025 made it a huge challenge,” Kenney continued. “I say that as an example of the fact that we have technologies that will allow us to meet climate goals but then you have conflicting political goals that prohibit the running of nuclear generating facilities.”
Exelon CEO Talks Capital Allocations, New Products
NARUC President Travis Kavulla conducted an interview with Exelon CEO Chris Crane that touched on subjects from capital allocations and new utility products to the struggles of its nuclear generation fleet and cybersecurity.
Kavulla asked Crane whether Exelon, which now operates in five states and D.C. following its acquisition of Pepco Holdings Inc., favors states with higher returns on equity in determining where to allocate capital.
Crane said each of the company’s six utilities maintains its own balance sheet and cash flow and that the company makes investments based on reliability requirements.
“It does at times require equity infusion from the parent. PHI right now, and for the next five years, will have equity infusions … on an annual basis.
“We don’t find that as a conflict,” Crane said. “We’ve never had to make a decision that a dollar goes into one jurisdiction versus another … there is enough capital and our balance sheets are strong.”
Crane said Exelon’s decisions on what “utility of the future” products to offer is based on “understanding what is a trend and what is a fad.”
“We have to differentiate. Technology is changing faster than it ever has in our industry,” Crane said. “We have to watch what the consumer wants versus what the commercial side wants to sell.”
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Commercial Customers Will Go it Alone to Meet Sustainability Goals
Commercial customers would like utilities’ help in meeting their sustainability goals but “will pursue their goals with or without” them, according to the Critical Consumer Issues Forum’s latest report released last week.
More than 80 state regulators, consumer advocates and utility representatives took part in meetings that resulted in the report, developing “consensus principles,” such as providing flexibility to consumers seeking new technologies and products while protecting nonparticipating consumers from cost shifts.
To be responsive to customers, Arizona Public Service will initiate some innovative projects without getting regulatory approval first, said Barbara Lockwood, vice president of regulation.
“We have taken the approach that there are some projects that we’re going to embark on and we’re not going to ask the commission [in advance]. We’re going to go do it and then we’re going to ask for recovery of those costs. We’re taking some risk that we never took in the past,” she said.
Lockwood cited a 25-MW microgrid the utility is building with the U.S. Navy at Marine Corps Air Station Yuma. The microgrid’s diesel generator can provide peak power to APS customers during normal operating conditions and is large enough to power all base operations during a grid disturbance. “We didn’t seek preapproval for that project,” Lockwood said. “It was important to move quickly.”
Federal-State Battle over Plains & Eastern Transmission Line
Jordan Wimpy, an attorney representing landowners opposed to Clean Line Energy Partners’ Plains & Eastern transmission line, said he is likely to file a court challenge seeking to block the Department of Energy’s record of decision supporting the project. “We are prepared to file and we are moving in that direction,” Wimpy said.
The department said in March that it would partner with Clean Line on the $2.5 billion, 700-mile HVDC transmission project, which would deliver 4,000 MW of wind power from the Oklahoma Panhandle to MISO and the Tennessee Valley Authority. The department acted after Clean Line was unable to win approval from Arkansas regulators. (See DOE Agrees to Join Clean Line’s Plains & Eastern Project.)
Who Will Do the Work?
Mark Bridgers, a principal with Continuum Capital, a Raleigh, N.C., investment banking advisory firm, presented a forecast indicating utilities need to add 50,000 new transmission and distribution workers. By 2018, Bridgers said, all of New England, much of the Mid-Atlantic and several Western and Midwest states will face shortages in T&D workers.
Bridgers gave a plug to the Underground Construction Workforce Alliance, which is building a coalition of industry associations, unions, suppliers, engineers, contractors and utilities to develop training programs and regulatory approaches to develop the workforce required.
